Global Project Licences
158. We commented in our last Report on the reporting
implications of the Six-Nation Framework Agreement on European
Defence Industrial Restructuring.[185]
The agreement has created a new instrument, the Global Project
Licence (GPL), which will be used to permit the export of the
end product of collaborative programmes by any of the partners[186]
to any country on a list of permitted destinations. This means
that UK-manufactured products could be exported from any of the
other five partner countries without this being recorded in UK
Annual Reports. In its response to our last Report, the Government
stated that:
The Government gave assurances in the 2001 and
2000 Annual Reports on Strategic Export Controls that Global Project
Licences will be included in future editions of the Report. We
estimate that such licences will be reported for the first time
in the 2003 Annual Report.[187]
159. We asked the Government in writing whether any
further thought had been given to how Global Project Licences
would be reported in future Annual Reports. The Government has
told us that they "expect that Global Project Licences will
be reported in a similar manner in which we report on OIELs in
the Annual Report. There will be an equivalent level of transparency".
We note also that "it is anticipated that a GPL will be issued
in the near future".[188]
160. When the Government reports on OIELs, it publishes
the broad categories of equipment permitted for export and the
destinations to which the export is permitted. This allows the
public to see that the Government is prepared to license the export
under open licences of, for example, components for combat aircraft
to India. Publishing equivalent information on Global Project
Licences would not necessarily reveal this fact, because the initial
destinations of components under the licences will be other partner
countries. If these components were manufactured into finished
aircraft in Italy, for example, for onward export to India, the
British Government's Annual Report might reveal only that aircraft
components were permitted for export to Italy under a Global Project
Licence. This would in fact be notably less transparent than the
information currently provided on OIELs in the Government's Annual
Reports.
161. During our inquiry on the 2000 Annual Report
the Government wrote to tell us that lists of permitted export
destinations for products jointly produced by the Agreement signatories
will be classified as commercial in confidence because "they
could alert international competitors to market opportunities".[189]
Only companies and partner countries involved in the particular
projects will have access to the relevant lists.
162. The obvious question is why information about
the permitted destinations for products manufactured under Global
Project Licences is more sensitive than information about the
permitted destinations of exports under SIELs and OIELswhich
the Government is prepared to publish. It could be argued that
information published in current Annual Reports on OIELs also
alerts international competitors to market opportunities.
163. One possible difference between Global Project
Licences and other types of licence is that the latter are generally
granted when the export is ready or nearly ready to take place.
Global Project Licences, on the other hand, will be granted before
manufacturing has even started. What this suggests is that the
list of permitted destinations under a Global Project Licence
might reasonably be withheld, but that once an agreement has been
reached to supply a destination with equipment produced under
such a licence, this destination should be published. This
would provide an equivalent level of transparency to that provided
about other types of licence. We recommend that, as a minimum,
information should be published in future Annual Reports showing
that a country is a permitted destination under a Global Project
Licence as soon as the Government is aware that agreement has
been reached with an end-user in that country for supply of equipment
produced under such a licence.
164. We are reassured by the Government's comments
in the 2001 Annual Report that:
For individual collaborative projects permitted
export destinations for exports of finished products would be
agreed by the authorities of the participating countries in a
particular project. These would be based on the destinations proposed
by industry where they believe there are likely prospects for
exports of the finished products. The treaty makes clear that
where circumstances have changed significantly for the worse,
a permitted export destination could be removed. In the majority
of such cases, it is unlikely that EU (and therefore Framework
Agreement) countries' policies on military exports to that destination
would differ. If, however, consensus is not possible, and if even
one participating state objects to a proposed export destination,
the treaty states that caution would prevail and the destination
would be removed.[190]
We note that the Government has the power under
the Six Nation Framework Agreement to refuse unilaterally to allow
the export to a particular destination of equipment produced collaboratively
under the agreement. We conclude that this element of the agreement
is essential to secure public confidence in the continuing robustness
of strategic export controls.
159